Suppose the Supply of Labour Is More Inelastic Than the Demand

question 33

Multiple Choice

Suppose the supply of labour is more inelastic than the demand for labour. Then, a payroll tax imposed on employers

• A) leads to the workers paying more of the tax than the employers.
• B) lowers the wage rate received by workers.
• C) shifts the demand curve for labour leftward.
• D) Only answers B and C are correct.
• E) Answers A, B and C are correct.

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